AutoZone 2010 Annual Report Download - page 97

We believe that the satisfaction of DIY customers and professional technicians is often impacted by our ability to
provide specific automotive products as requested. Each store carries the same basic product lines, but we tailor
our parts inventory to the makes and models of the vehicles in each store’s trade area. Our hub stores carry a
larger assortment of products that can be delivered to commercial customers or to local satellite stores.
We are constantly updating the products we offer to ensure that our inventory matches the products our customers
demand.
Pricing
We want to be perceived by our customers as the value leader in our industry, by consistently providing quality
merchandise at the right price, backed by a satisfactory warranty and outstanding customer service. On many of
our products we offer multiple value choices in a good/better/best assortment, with appropriate price and quality
differences from the “good” products to the “better” and “best” products. A key differentiating component versus
our competitors is our exclusive line of in-house brands, which includes Valucraft, AutoZone, Duralast and
Duralast Gold brands. We believe that our overall value compares favorably to that of our competitors.
Brand: Advertising and Promotions
We believe that targeted advertising and promotions play important roles in succeeding in today’s environment.
We are constantly working to understand our customers’ wants and needs so that we can build long-lasting, loyal
relationships. We utilize promotions, advertising, and loyalty card programs primarily to advise customers about
the overall importance of vehicle maintenance, our great value and the availability of high quality parts.
Broadcast and internet media are our primary advertising methods of driving traffic to our stores. We utilize in-
store signage, creative product placement and promotions to help educate customers about products that they
need.
Store Design and Visual Merchandising
We design and build stores for high visual impact. The typical AutoZone store utilizes colorful exterior and
interior signage, exposed beams and ductwork and brightly lighted interiors. Maintenance products, accessories
and non-automotive items are attractively displayed for easy browsing by customers. In-store signage and special
displays promote products on floor displays, end caps and shelves.
Commercial
Our commercial sales program operates in a highly fragmented market, and we are one of the leading distributors
of automotive parts and other products to local, regional and national repair garages, dealers, service stations and
public sector accounts in the United States, Puerto Rico and Mexico. As a part of the program, we offer delivery
to our commercial customers, as well as direct commercial sales through www.autozonepro.com. The program
operated out of 2,424 domestic stores and 173 of our Mexico stores as of August 28, 2010. Through our hub
stores, we offer a greater range of parts and products desired by professional technicians; this additional inventory
is available for our DIY customers as well. We have dedicated sales teams focused on national, regional and
public sector commercial accounts.
Store Operations
Store Formats
Substantially all AutoZone stores are based on standard store formats, resulting in generally consistent
appearance, merchandising and product mix. Approximately 85% to 90% of each store’s square footage is selling
space, of which approximately 40% to 45% is dedicated to hard parts inventory. The hard parts inventory area is
generally fronted by counters or pods that run the depth or length of the store, dividing the hard parts area from
the remainder of the store. The remaining selling space contains displays of maintenance, accessories and non-
automotive items.
We believe that our stores are “destination stores,” generating their own traffic rather than relying on traffic
created by adjacent stores. Therefore, we situate most stores on major thoroughfares with easy access and good
parking.
7
10-K